MANILA – The Bangko Sentral ng Pilipinas (BSP) kept the benchmark policy rate steady at two percent on Thursday.
This was the seventh consecutive policy meeting that the BSP kept the benchmark interest rate at a record low as the BSP reaffirmed its commitment to remain “accommodative” to support the economy during the pandemic.
BSP governor Benjamin Diokno earlier stated that the move to tighten the key policy rate and reduce the reserve requirement is “not the right thing to do” as of this time.
Although inflation accelerated to 4.9 percent in August from four percent in July, the central bank chief said it remained within expectations and is likely to settle within the middle band of the government target of two to four percent target range by 2022.
Despite the positive economic growth in the second quarter and the progress in the country’s coronavirus disease 2019 vaccination plan, the new Delta variant could pose risks to recovery.
Economic growth hit 11.8 percent in the second quarter following a contraction of 3.9 percent in the first quarter.
The high growth figure in Q2 takes into account the low base effects, as the economy contracted by a record 17 percent in the same period last year.
Other central banks have hinted they will soon start raising interest rates as economic recovery in their respective countries gather pace. Many are taking their cue from the United States Federal Reserve, which is expected to “soon” taper off its monetary stimulus.(ABS-CBN News)
